Note 2.—Mortgage Loans Held-for-Sale

A summary of the unpaid principal balance (UPB) of mortgage loans held-for-sale by type is presented below:


	March 31,		December 31,
	2020		2019
Government (1)	$	12,188	$	51,019
Conventional (2)		245,878		436,040
Non-qualified mortgages (NonQM)		264,782		274,834
Fair value adjustment (3)		(25,243)		20,250
Total mortgage loans held-for-sale	$	497,605	$	782,143

(1)

Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA).

(2)

Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC).

(3)

Changes in fair value are included in (loss) gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss.

At March 31, 2020 and December 31, 2019, the Company had $2.9 million and $4.5 million, respectively, in UPB of mortgage loans held-for-sale that were in nonaccrual status as the loans were 90 days or more delinquent. The carrying value of these nonaccrual loans at March 31, 2020 and December 31, 2019 were $2.3 million and $4.2 million, respectively.

(Loss) gain on sale of loans, net in the consolidated statements of operations and comprehensive loss, is comprised of the following for the three months ended March 31, 2020 and 2019:


	For the Three Months Ended
	March 31,
	2020		2019
Gain on sale of mortgage loans	$	47,491	$	13,608
Premium from servicing retained loan sales		1,689		1,583
Unrealized losses from derivative financial instruments		(6,277)		(609)
Losses from derivative financial instruments		(10,922)		(1,054)
Mark to market (loss) gain on LHFS		(45,493)		3,469
Direct origination expenses, net		(9,255)		(3,153)
Provision for repurchases		(5,395)		(1,630)
(Loss) gain on sale of loans, net	$	(28,162)	$	12,214